AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                 -----------------------------------------


     This AMENDED AND RESTATED  AGREEMENT is made as of April 18, 1997, and
amended as of July 18, 1997, by and between COMSAT Corporation  ("COMSAT"),
a District of Columbia  corporation,  and Allen  Flower,  a resident of the
Commonwealth of Virginia (the "Executive").

     WHEREAS,  the Executive  serves as Vice President and Chief  Financial
Officer of COMSAT;

     WHEREAS, the Board of Directors of COMSAT (the "Board") believes it to
be in the best  interests of COMSAT to enter into this  Agreement to ensure
the Executive's continuing services to COMSAT; and

     WHEREAS,  COMSAT  desires to continue to employ the  Executive as Vice
President and Chief Financial Officer of COMSAT,  and the Executive desires
to continue such employment, on the terms and conditions set forth herein;

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
agreements  made herein,  and intending to be legally bound hereby,  COMSAT
and the Executive agree as follows:

     1.   EMPLOYMENT; DUTIES.
          ------------------

          (a)  EMPLOYMENT AND  EMPLOYMENT  PERIOD.  COMSAT shall employ the
Executive to serve as Vice President and Chief Financial  Officer of COMSAT
or any successor entity for a period (the "Employment  Period")  commencing
on April 18, 1997 (the "Effective  Date") and continuing  thereafter  until
April 17, 2000 unless  terminated in accordance with the provisions of this
Agreement.  Each  12-month  period  ending on the  anniversary  date of the
Effective Date is referred to herein as a "year of the Employment Period."

          (b) OFFICES,  DUTIES AND  RESPONSIBILITIES.  The Executive  shall
report to the Chief Executive  Officer of COMSAT.  The Executive's  offices
initially  shall be located at COMSAT's  present  headquarters in Bethesda,
Maryland.  The Executive  shall have all duties and  authority  customarily
accorded a Vice President and Chief Financial Officer.

          (c)  DEVOTION  TO  INTERESTS  OF COMSAT.  During  the  Employment
Period,  the Executive shall devote his best efforts and full business time
and attention to the performance of his duties  hereunder.  Notwithstanding
the  foregoing,  the  Executive  shall be  entitled  to  undertake  outside
activities (E.G. charitable,  educational, personal interests, and board of
directors  memberships)  that  do  not  compete  with  COMSAT  and  do  not
unreasonably  or materially  interfere  with the  performance of his duties
hereunder  as  reasonably  determined  by the Chief  Executive  Officer  in
consultation with the Executive.

<PAGE>

     2.   COMPENSATION AND FRINGE BENEFITS.

          (a) BASE  COMPENSATION.  COMSAT  shall pay the  Executive  a base
salary ("Base Salary") during the Employment Period,  with payments made in
installments in accordance with COMSAT's  regular practice for compensating
executive personnel,  provided that in no event shall such payments be made
less frequently than twice per month.  The initial annual Base Salary shall
be  $210,000.  Thereafter,  the  Base  Salary  for the  Executive  shall be
reviewed for increases  annually during the Employment  period,  consistent
with COMSAT's  normal review  process.  Any Base Salary  increases shall be
approved by the Board in its sole discretion.

          (b) BONUS COMPENSATION. The Executive will be eligible to receive
bonuses  ("Annual  Bonus")  during the  Employment  Period under the Annual
Incentive Plan (the "AIP") in accordance with the following parameters: (i)
the target bonus for each year during the Employment Period shall be 50% of
Base  Salary for  achieving  100% of the target  level for the  performance
measures  and (ii) the  performance  measures,  the  relative  weight to be
accorded  each  performance  measure  and the  amount of bonus  payable  in
relation to the target  bonus for  achieving  more or less than 100% of the
target level for the performance measures shall be determined for each year
during  the  Employment   Period  by  the  Committee  on  Compensation  and
Management Development of the Board (the "Compensation Committee").

          (c) FRINGE  BENEFITS.  The  Executive  shall be  entitled  to the
fringe  benefits in effect for COMSAT senior  executives from time to time,
including (i) participation in the COMSAT Directors and Executives Deferred
Compensation  Plan,  the COMSAT Split  Dollar  Insurance  Plan,  the COMSAT
Educational  Grant Program,  the COMSAT Retirement Plan, the COMSAT Savings
and  Profit-Sharing  Plan,  the COMSAT 1995 Key  Employee  Stock Plan,  the
COMSAT  Employee  Stock  Purchase  Plan,  the COMSAT health and  disability
insurance  programs  and the COMSAT  financial  planning  program  and (ii)
reimbursement of reasonable expenses incurred in connection with travel and
entertainment  related to COMSAT's business and affairs. The Executive also
shall be entitled to such other or additional  fringe  benefits as are made
available to COMSAT senior executives during the Employment Period.  COMSAT
reserves the right to modify or  terminate at any time the fringe  benefits
provided to the senior management group.

          (d) SERP.  The Executive  shall  continue to  participate  in the
COMSAT  Insurance and  Retirement  Plan for  Executives  (the "SERP").  Any
future  amendments  or changes to the SERP which  provide for a  reduction,
deferral or elimination  of benefits  payable to  participants  in the SERP
shall  expressly not apply to the Executive  unless the Executive  consents
otherwise.

          (e)  LEGAL   EXPENSES.   The  Executive   shall  be  entitled  to
reimbursement  of the Executive's  reasonable legal fees and costs incurred
in connection with the negotiation and execution of this Agreement, subject
to a maximum  reimbursement  of $5,000.


                                    -2-

<PAGE>


     3.   TRADE SECRETS; RETURN OF DOCUMENTS AND PROPERTY.
          -----------------------------------------------

          (a) The  Executive  acknowledges  that  during  the course of his
employment he will receive secret, confidential and proprietary information
("Trade  Secrets") of COMSAT and of other  companies with which COMSAT does
business on a  confidential  basis and that the  Executive  will create and
develop  Trade  Secrets  for the  benefit of COMSAT.  Trade  Secrets  shall
include,  without  limitation,  matters  of a  technical  nature,  such  as
scientific and engineering secrets,  "know-how," formulae, secret processes
or machines,  inventions and computer programs (including  documentation of
such programs), and matters of a business nature, such as customer data and
proprietary  information about costs, profits,  markets, sales and customer
databases,  and other  information  of a similar  nature to the  extent not
available  to the  public,  and plans  for  future  development.  All Trade
Secrets  disclosed to or created by the Executive shall be deemed to be the
exclusive property of COMSAT. The Executive acknowledges that Trade Secrets
have  economic  value to COMSAT due to the fact that Trade  Secrets are not
generally known to the public or the trade and that the unauthorized use or
disclosure of Trade Secrets is likely to be detrimental to the interests of
COMSAT and its  subsidiaries.  The  Executive  therefore  agrees to hold in
strict  confidence  and not to disclose to any third party any Trade Secret
acquired or created or developed by the  Executive  during the term of this
Agreement  except (i) when the Executive  uses o discloses any Trade Secret
in the proper  course of the  Executive's  rendition  of services to COMSAT
hereunder,  (ii) when such Trade Secret becomes public knowledge other than
through a breach of this Agreement, or (iii) when the Executive is required
to disclose  any Trade  Secret  pursuant to any valid  legal  process.  The
Executive  shall notify  COMSAT  immediately  of any such legal  process in
order to enable  COMSAT to contest  such legal  process's  validity.  After
termination  of this  Agreement,  the Executive  shall not use or otherwise
disclose Trade Secrets unless such information (x) becomes public knowledge
other than  through a breach of this  Agreement,  (y) is  disclosed  to the
Executive  by a third party who is entitled  to receive and  disclose  such
Trade  Secret,  or (z) is  required to be  disclosed  pursuant to any valid
legal process,  in which case the Executive shall notify COMSAT immediately
of any such legal  process in order to enable  COMSAT to contest such legal
process's validity.

          (b) Upon the  effective  date of  notice  of the  Executive's  or
COMSAT's  election to  terminate  this  Agreement,  or at any time upon the
request of COMSAT, the Executive (or his heirs or personal representatives)
shall  deliver to COMSAT (i) all  documents  and  materials  containing  or
otherwise  relating  to Trade  Secrets  or other  information  relating  to
COMSAT's business and affairs, and (ii) all documents,  materials and other
property belonging to COMSAT, which in either case are in the possession or
under  the   control   of  the   Executive   (or  his  heirs  or   personal
representatives).  The  Executive  shall be entitled  to keep his  personal
records  (including  Rolodex)  relating  to COMSAT's  business  and affairs
except to the extent those  contain  documents  or  materials  described in
clause (i) of the preceding sentence.

     4.  DISCOVERIES AND WORKS. All discoveries and works made or conceived
by  the  Executive  during  his  employment  by  COMSAT  pursuant  to  this
Agreement,  jointly or with  others,  that  relate to  COMSAT's  activities
("Discoveries  and Works") shall be owned by COMSAT.  Discoveries and Works

                                    -3-

<PAGE>

shall include, without limitation, inventions, computer programs (including
documentation  of  such  programs),   technical  improvements,   processes,
drawings and works of authorship.  The Executive shall (a) promptly notify,
make full  disclosure  to, and execute and deliver any documents  requested
by, COMSAT to evidence or better assure title to such Discoveries and Works
in COMSAT, (b) assist COMSAT in obtaining or maintain for itself at its own
expense  United  States  and  foreign  patents,  copyrights,  trade  secret
protection or other  protection of any and all such  Discoveries and Works,
and  promptly   execute,   whether  during  his  employment  by  COMSAT  or
thereafter, all applications or other endorsements necessary or appropriate
to maintain  patents  and other  rights for COMSAT and to protect its title
thereto.  Any  Discoveries  and Works  which,  within six months  after the
termination of the  Executive's  employment by COMSAT,  are made disclosed,
reduced to a tangible  or written  form or  description,  or are reduced to
practice  by the  Executive  and which  pertain  to work  performed  by the
Executive while with COMSAT shall, as between the Executive and COMSAT,  be
presumed to have been made during the Executive's employment by COMSAT.

     5.   TERMINATION.  This  Agreement  shall  remain in effect  during the
Employment  Period,  and this  Agreement and  Executive's  employment  with
COMSAT may be terminated only as follows:

          (a) The Executive's employment may be terminated by the Executive
at any time upon 45 days advance written notice to COMSAT for "Good Reason"
(as defined  below).  In such event,  or if the  Executive's  employment is
terminated  by COMSAT  without  "Cause" (as defined  below),  the Executive
shall be entitled to receive the following  benefits until the later of (x)
one year after the date of the Executive's termination of employment or (y)
April 17, 2000:

          (i)  The  Executive's  Base  Salary  in  effect  at the  date  of
  termination;

          (ii) An  Annual  Bonus  equal  to 50% of his  then  current  Base
  Salary; and

          (iii) All benefits  provided pursuant to Sections 2(c) and (d) of
this  Agreement,  which  shall be deemed to vest fully and  immediately  if
subject  to  vesting;  provided,  however,  that  in the  event  COMSAT  is
precluded from providing coverage under any such benefit plan by applicable
law or regulation, COMSAT may provide the Executive with a payment equal to
the cost of such  coverage  without  regard to tax  effect.  The  foregoing
benefits  shall be  calculated  in  accordance  with the  provisions of the
applicable   plans  as  if  the  Executive  had  retired  on  his  date  of
termination,  provided that the Board  reserves the discretion to waive the
applicable early retirement reduction under the SERP in such event.

          (b)  "Good  Reason"  shall  mean  the  occurrence  of  any of the
following (other than for "Cause"), without the Executive's express written
consent:  (i) the assignment to the Executive of duties  inconsistent  with
the Executive's  status as an executive  officer of COMSAT or a substantial
reduction  by COMSAT of the  Executive's  responsibilities  as an executive
officer of COMSAT;  (ii) any relocation of the Executive's  offices outside
the  Washington,  D.C.  metropolitan  area by  COMSAT  prior  to the  third

                                    -4-

<PAGE>


anniversary  of the Effective  Date;  or (iii) any material  default of the
provisions of Section 2 of this Agreement  which  continues for 20 business
days  following  COMSAT's  receipt of  written  notice  from the  Executive
specifying the manner in which COMSAT is in default of such provisions.  In
order for the  Executive to  terminate  employment  for "Good  Reason," the
Executive must give COMSAT written notice of his  termination of employment
for "Good Reason,"  stating the basis for the  termination,  within 90 days
after the  Executive  learns of the  occurrence  of the event  constituting
"Good Reason."

          (c) The  Executive's  employment  may be terminated by COMSAT for
Cause at any time upon ten days written notice to the Executive,  and after
giving the  Executive  an  opportunity  to discuss such  decision  with the
Board.  For  purposes  of this  Agreement,  COMSAT  shall  have  "Cause" to
terminate the Executive's  employment  hereunder upon (i) the continued and
deliberate  failure of the Executive to perform his material  duties,  in a
manner  substantially  consistent with the manner reasonably  prescribed by
the Board and in accordance  with the terms of this  Agreement  (other than
any such failure  resulting  from his  incapacity due to physical or mental
illness),  which  failure  continues  for 20 business  days  following  the
Executive's  receipt of written notice from the Board specifying the manner
in which the  Executive  is in default of his duties,  (ii) the engaging by
the Executive in  intentional  serious  misconduct  that is materially  and
demonstrably injurious to COMSAT or its reputation, which misconduct, if it
is reasonably  capable of being cured, is not cured by the Executive within
20 business days following the  Executive's  receipt of written notice from
the Board  specifying the serious  misconduct  engaged in by the Executive,
(iii) the conviction of the Executive of commission of a felony, whether or
not such felony was committed in connection with COMSAT's business, or (iv)
any material breach by the Executive of Section 10 hereof, which breach, if
it is  reasonably  capable  of being  cured,  i not cured by the  Executive
within 20 business days following the Executive's receipt of written notice
from the Board  specifying  the breach of Section 10 by the  Executive.  If
COMSAT shall terminate the Executive's  employment for "Cause," COMSAT,  in
full  satisfaction of all of COMSAT's  obligations under this Agreement and
in respect of the  termination of the  Executive's  employment with COMSAT,
shall  pay the  Executive  his  Base  Salary  and any  other  compensation,
benefits and  reimbursements due him under COMSAT plans through the date of
termination of his employment.

          (d) If, prior to the  expiration or termination of the Employment
Period,  the Executive shall have been unable to perform  substantially his
duties by reason of  disability  or  impairment  of health for at least six
consecutive calendar months,  COMSAT shall have the right to terminate this
Agreement by giving 60 days written notice to the Executive to that effect,
but only if at the time such notice is given such  disability or impairment
is still  continuing.  Following the expiration of the notice  period,  the
Employment  Period shall terminate with the payment of the Executive's Base
Salary for the month in which  notice is given and a prorated  Annual Bonus
through such month.  In the event of a dispute as to whether the  Executive
is disabled within the meaning of this Section 5(d), or the duration of any
disability, either party may request a medical examination of the Executive
by a doctor  appointed  by the  Chief of Staff of a  hospital  selected  by
mutual agreement of the parties, or as the parties may otherwise agree, and

                                    -5-

<PAGE>

the written  medical opinion of such doctor shall be conclusive and binding
upon the parties as to whether the  Executive  has become  disabled and the
date when such disability arose. The cost of any such medical  examinations
shall be borne by COMSAT. In no event shall this Agreement terminate before
COMSAT's  long-term  disability  benefits  under  applicable  plans  become
payable to the Executive.

          (e) If, prior to the  expiration or termination of the Employment
Period, the Executive shall die, COMSAT shall pay to the Executive's estate
his Base Salary and a prorated Annual Bonus through the end of the month in
which the Executive's  death occurred,  at which time the Employment Period
shall terminate without further notice.

          (f) If COMSAT elects not to renew the Executive's employment with
COMSAT at the end of the  Employment  Period and the  Executive  terminates
employment at the end of the  Employment  Period,  the  Executive  shall be
entitled to receive the  payments  described in Section  5(a)(i),  (ii) and
(iii) for the period  beginning on the date of the Executive's  termination
of  employment  and ending one year after the  Executive's  termination  of
employment.

          (g) If either  the  Executive  or COMSAT  elects not to renew the
Executive's employment with COMSAT at the end of the Employment Period, the
Executive shall be entitled to receive payments under the SERP beginning on
May 1, 2000 (the  first  day of the  month  after the end of such  period),
calculated  in  accordance  with the  provisions  of the SERP  based on the
Executive's  retirement on that date,  provided that the Board reserves the
discretion to waive the applicable  early  retirement  reduction  under the
SERP in such event.  If the  Executive's  employment with COMSAT under this
Agreement  is  terminated  either by the  Executive  for Good  Reason or by
COMSAT  without  Cause before the  Executive  attains age 55, the Executive
shall be entitled to receive  payments under the SERP beginning on December
1, 1998 (the first day of the month after the  Executive's  55th birthday),
calculated  in  accordance  with  the  provisions  of  the  SERP  as if the
Executive  retired  on that  date,  provided  that the Board  reserves  the
discretion to waive the applicable  early  retirement  reduction  under the
SERP in such event.  If the Executive dies before  payments begin under the
SERP, the  Executive's  surviving  spouse,  if any, shall receive under the
SERP a $200,000 lump sum death benefit,  plus annual benefit payments for a
ten year period equal to 50% of the  Executive's  accrued benefit under the
SERP,  according to the terms of the SERP.  The  provisions of this Section
5(g) shall be administered consistent with the terms of the SERP.

          (h) If  the  Executive  voluntarily  terminates  employment  with
COMSAT, such termination shall not be considered a breach of this Agreement
by the Executive and shall not adversely  affect the  Executive's  right to
receive such  benefits as may be payable to the Executive on account of his
termination  of employment  under  applicable  COMSAT plans.  The Executive
shall remain  obligated to comply with the  provisions of Sections 3, 4, 10
and 12 of this Agreement.

                                    -6-

<PAGE>

     6.   CHANGE OF CONTROL. If a change of control (as defined for purposes
purposes of COMSAT's  benefit plans) occurs during the Employment Term, the
change of control shall not adversely affect any of the Executive's  rights
under this Agreement, and this Agreement shall continue in effect according
to its terms.  In the event of a change of control,  the Executive shall be
entitled to vesting and payment of benefits  according to the terms of this
Agreement or COMSAT's applicable plans, whichever is more favorable.

     7.   CERTAIN ADDITIONAL PAYMENTS.

          (a)  Notwithstanding  anything in this Agreement to the contrary,
in the event that it shall be determined that any payment or benefit to the
Executive,  whether pursuant to the terms of this Agreement or otherwise (a
"Payment"),  would  constitute  an "excess  parachute  payment"  within the
meaning of Section  280G of the Internal  Revenue Code of 1986,  as amended
(the "Code"), the Executive shall be paid an additional amount (a "Gross-Up
Payment")  such  that  the  net  amount  retained  by the  Executive  after
deduction of any excise tax imposed under Section 4999 of the Code, and any
federal,  state and local  income  and  employment  taxes and  excise  tax,
including any interest and penalties with respect thereto, imposed upon the
Gross-Up Payment shall be equal to the Payment. For purposes of determining
the amount of the Gross-Up  Payment,  the Executive  shall be deemed to pay
federal  income tax and  employment  taxes at the highest  marginal rate of
federal  income and  employment  taxation in the calendar year in which the
Gross-Up  Payment  is to be made and state and  local  income  taxes at the
highest  marginal  rate  of  taxation  in the  state  and  locality  of the
Executive's residence on the date the Payment is made, net of the reduction
in federal income taxes that the Executive may obtain from the deduction of
such state and local income taxes.

          (b) All  determinations  to be made under this Section 7 shall be
made by COMSAT's  independent  public  accountant  immediately prior to the
date the Payment is made (the "Accounting Firm"),  which firm shall provide
its determinations  and any supporting  calculations and workpapers both to
COMSAT  and  the  Executive   within  10  days  of  such  date.   Any  such
determination  by the Accounting  Firm shall be binding upon COMSAT and the
Executive.  Within  five  days  after  receipt  of  the  Accounting  Firm's
determination,  COMSAT  shall pay to the  Executive  the  Gross-Up  Payment
determined by the Accounting Firm.

          (c) In the  event  that upon any  audit by the  Internal  Revenue
Service, or by a state or local taxing authority,  of a Payment or Gross-Up
Payment,  a change is finally  determined  to be  required in the amount of
taxes paid by the Executive,  appropriate  adjustments  shall be made under
this  Section  such that the net amount  which is payable to the  Executive
after  taking into account the  provisions  of Section 4999 of the Code and
any  interest  and  penalties  shall  reflect  the  intent of the partie as
expressed  in  paragraph  (a)  above,  in  the  manner  determined  by  the
Accounting  Firm. The Executive shall notify COMSAT in writing of any claim
by the Internal  Revenue  Service  that, if  successful,  would require the
payment by COMSAT of a Gross-Up Payment.  Such notification  shall be given
as soon as  practicable  but no later  than ten  business  days  after  the
Executive is informed in writing of such claim and shall apprise  COMSAT of

                                    -7-


the nature of such claim and the date on which such claim is requested to b
paid. The Executive shall not pay such claim prior to the expiration of the
30-day  period  following  the date on which it gives such notice to COMSAT
(or such shorter  period  ending on the date that any payment of taxes with
respect to such claim is due). If COMSAT  notifies the Executive in writing
prior to the  expiration  of such  period  that it desires to contest  such
claim,  the Executive  shall:  (i) give COMSAT any  information  reasonably
requested  by COMSAT  relating  to such  claim;  (ii)  take  such  action i
connection with contesting such claim as COMSAT shall reasonably request in
writing from time to time, including,  without limitation,  accepting legal
representation  with  respect  to  such  claim  by an  attorney  reasonably
selected  by COMSAT;  (iii)  cooperate  with  COMSAT in good faith in order
effectively to contest such claim; and (iv) permit COMSAT to participate in
any  proceedings  relating to such claim;  PROVIDED,  HOWEVER,  that COMSAT
shall bear and pay directly all costs and  expenses  (including  additional
interest and penalties)  incurred in connection with such contest and shall
indemnify and hold the Executive  harmless,  on an after-tax basis, for any
excise tax or income tax  (including  interest and  penalties  with respect
thereto)  imposed as a result of such  representation  and payment of costs
and  expenses.  Without  limitation  on the  foregoing  provisions  of this
Section 7, COMSAT shall control all  proceedings  taken in connection  with
such  contest  and,  at its sole  option,  may  pursue or forgo any and all
administrative  appeals,  proceedings,  hearings and  conferences  with the
taxing  authority in respect of such claim and may contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination  before any  administrative  tribunal,  in a court of initial
jurisdiction  and  in  one  or  more  appellate  courts,  as  COMSAT  shall
determine.  COMSAT's control of the contest shall be limited to issues with
respect to which a Gross-Up  Payment  would be  payable  hereunder  and the
Executive  shall be entitled to settle or contest,  as the case may be, any
other issue  raised by the  Internal  Revenue  Service or any other  taxing
authority.

          (d)  All of the  fees  and  expenses  of the  Accounting  Firm in
performing the  determinations  referred to in paragraphs (b) and (c) above
shall be borne  solely  by  COMSAT.  COMSAT  agrees to  indemnify  and hold
harmless the Accounting Firm from any and all claims,  damages and expenses
resulting from or relating to its determinations pursuant to paragraphs (b)
and (c) above,  except for claims,  damages or expenses  resulting from the
gross negligence or willful misconduct of the Accounting Firm.

     8.  SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any  termination of the Executive's  employment and
the Employment Term to the extent necessary to the intended preservation of
such rights and obligations.


     9.  MITIGATION AND NO OFFSETS.  The Executive shall not be required to
mitigate  the  amount  of any  payment  or  benefit  provided  for in  this
Agreement by seeking  other  employment  or otherwise and there shall be no
offset against amounts due the Executive under this Agreement on account of
any  remuneration  attributable  to any subsequent  employment  that he may
obtain.  COMSAT's  obligations  to make payments  under this  Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances,  including,  without limitation, any set-off,  counterclaim,

                                    -8-

<PAGE>


recoupment,  defense  or other  right  which  COMSAT may have  against  the
Executive or others.

     10.  NON-COMPETITION.

          (a)  NON-COMPETITION  AGREEMENT.  As an inducement  for COMSAT to
enter  into  this  Agreement,   the  Executive  agrees  that,   during  the
Non-Competition Period (as defined below), the Executive shall not, without
the prior written consent of the Board, engage or participate,  directly or
indirectly,   as  principal,   agent,   employee,   employer,   consultant,
stockholder, partner or in any other individual capacity whatsoever, in the
conduct or management  of, or own any stock or any other equity  investment
in or debt  of,  any  business  which  is  competitive  with  any  business
conducted by COMSAT. The Non-Competition Period is the period commencing as
of the  Effective  Date  and  running  through  the  date  that is one year
following  the  date  on  which  the  Executive's  employment  with  COMSAT
terminates for any reason.

          (b) COMPETITIVE  BUSINESS.  For the purpose of this Agreement,  a
business shall be considered to be competitive  with any business of COMSAT
only if such  business is engaged in  providing  services  or products  (i)
comparable  to or  competitive  with (A) any  service or product  currently
provided by COMSAT during the Employment Period; (B) any service or product
which  evolves from or results  from  enhancements  in the ordinary  course
during the  Non-Competition  Period to the services or products provided by
COMSAT as of the date hereof or during the  Employment  Period;  or (C) any
future  service or product of COMSAT as to which the  Executive  materially
and substantially participated in the development or enhancement,  and (ii)
to customers,  distributors  or clients of the type served by COMSAT during
the Non-Competition Period.

          (c)  NON-SOLICITATION  OF EMPLOYEES.  During the  Non-Competition
Period,  the Executive  will not (for his own benefit or for the benefit of
any person or entity  other than COMSAT)  solicit,  or assist any person or
entity other than COMSAT to solicit,  any officer,  director,  executive or
employee (other than an administrative  or clerical  employee) of COMSAT to
leave his or her employment.

          (d) REASONABLENESS;  INTERPRETATION.  The Executive  acknowledges
and agrees,  solely for purposes of determining the  enforceability of this
Section 10 (and not for purposes of determining the amount of money damages
or for any  other  reason),  that (i) the  markets  served  by  COMSAT  are
national and international and are not dependent on the geographic location
of executive  personnel or the businesses by which they are employed;  (ii)
the  length  of the  Non-Competition  Period  is  linked to the term of the
Employment Period; and (iii) the above covenants are manifestly  reasonable
on their face, and the parties  expressly agree that such restrictions have
been  designed to be  reasonable  and no greater  than is required  for the
protection  of COMSAT.  In the event that the  covenants in this Section 10
shall be determined by any court of competent jurisdiction in any action to

                                    -9-


be  unenforceable  by reason of their  extending  for too great a period of
time or over too great a geographical  area or by reason of their being too
extensive in any other  respect,  they shall be  interpreted to extend only
over the maximum period of time for which they may be  enforceable,  and/or
over the  maximum  geographical  area as to which  they may be  enforceable
and/or to the maximum  extent in all other respects as to which they may be
enforceable, all as determined by such court in such action.

          (e)  INVESTMENT.  Nothing  in this  Agreement  shall be deemed to
prohibit  the  Executive  from  owning  equity or debt  investments  in any
corporation,  partnership or other entity which is competitive with COMSAT,
provided that such  investments (i) are passive  investments and constitute
five percent or less of the outstanding equity securities of such an entity
the equity securities of which are traded on a national securities exchange
or other public market, or (ii) are approved by the Board.


     11.  INDEMNIFICATION;  LIABILITY  INSURANCE.  The  Executive  shall be
entitled to indemnification and coverage under COMSAT's liability insurance
policy for  officers  to the same extent as other  officers  of COMSAT.  In
addition,  the  Executive  shall  be  indemnified  to  the  maximum  extent
permitted by law of the jurisdiction in which COMSAT is incorporated, as it
may be amended from time to time.


     12.  ENFORCEMENT.
          -----------

          (a) The Executive  acknowledges that a breach of the covenants or
provisions  contained in Sections 3, 4 and 10 of this  Agreement will cause
irreparable  damage to COMSAT,  the exact amount of which will be difficult
to  ascertain,  and that the  remedies  at law for any such  breach will be
inadequate.  Accordingly,  the  Executive  agrees  that  if  the  Executive
breaches  or  threatens  to  breach  any of  the  covenants  or  provisions
contained  in  Sections 3, 4 and 10 of this  Agreement,  in addition to any
other remedy  which may be  available at law or in equity,  COMSAT shall be
entitled to seek specific  performance and injunctive  relief in a court of
competent jurisdiction after notice and a hearing.

          (b) The parties  expressly agree that any litigation  directly or
indirectly  arising  out of or  relating to this  Agreement,  including  an
action brought by COMSAT pursuant to this Section 12, shall be brought in a
court of competent jurisdiction in the State of Maryland.


     13.  EXPENSES OF ENFORCING THE AGREEMENT.  If the Executive  brings an
action to enforce any of the obligations of COMSAT under this Agreement and
prevails on any material  issue,  COMSAT shall pay the  Executive on demand
the amount  necessary to reimburse the Executive in full for all reasonable
expenses (including reasonable attorneys' fees and legal expenses) incurred
by the  Executive  in  enforcing  the  obligations  of  COMSAT  under  this
Agreement.


     14.  SEVERABILITY.   Should  any   provision  of  this   Agreement  be
determined to be  unenforceable  or prohibited by any applicable  law, such
provision  shall be ineffective to the extent,  and only to the extent,  of
such  unenforceability or prohibition  without  invalidating the balance of

                                   -10-

<PAGE>


such  provision  or any other  provision  of this  Agreement,  and any such
unenforceability or prohibition in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     15.  ASSIGNMENT.  The Executive's  rights and  obligations  under this
Agreement  shall not be assignable by the  Executive.  COMSAT's  rights and
obligations  under this Agreement  shall not be assignable by COMSAT except
as  incident  to  the  transfer,   by  merger  or  otherwise,   of  all  or
substantially  all of the  business  of  COMSAT.  In the  event of any such
assignment  by COMSAT,  all rights of COMSAT  hereunder  shall inure to the
benefit of the  assignee,  provided  that all  references  herein to COMSAT
shall be deemed to refer with equal  force and effect to any  corporate  or
other successor of COMSAT.

     16.  NOTICES.  All notices and other communications which are required
or may be given  under  this  Agreement  shall be in  writing  and shall be
deemed to have been duly given when received if personally delivered;  when
transmitted if transmitted by telecopy,  electronic or digital transmission
method,  provided  that in such case it shall also be sent by  certified or
registered  mail,  return receipt  requested;  the day after it is sent, if
sent for next day delivery to a domestic  address by  recognized  overnight
delivery  service (E.G.,  Federal  Express);  and upon receipt,  if sent by
certified or registered mail,  return receipt  requested.  Unless otherwise
changed by notice, in each case notice shall be sent to:

     If to the Executive, addressed to:

          Allen E. Flower
          3601 N. Lincoln Street
          Arlington, Virginia 22207

     With a copy (not constituting notice) to:

          Joseph E. Bachelder, Esquire
          780 Third Avenue
          New York, N.Y. 10017

     If to COMSAT, addressed to:

          COMSAT Corporation
          6560 Rock Spring Drive
          Bethesda, MD 20817
          Attention:  Betty C. Alewine
          Telecopier No.:  (301) 214-7134


                                   -11-

<PAGE>

     With a copy (not constituting notice) to:

          COMSAT Corporation
          6560 Rock Spring Drive
          Bethesda, MD 20817
          Attention:  Robert N. Davis, Jr.
          Telecopier No.:  (301) 214-7128


     17.  MISCELLANEOUS.  This Agreement  constitutes the entire agreement,
and supersedes all prior agreements,  of the parties hereto relating to the
subject  matter  hereof,  and  there  are  no  written  or  oral  terms  or
representations  made by either party other than those contained herein. No
amendment,  supplement,  modification  or waiver of this Agreement shall be
binding unless  executed in writing by the party to be bound  thereby.  The
validity,  interpretation,  performance  and  enforcement  of the Agreement
shall be  governed  by the laws of the  State of  Maryland  without  giving
effect to  conflicts of laws  principles  thereof.  The headings  contained
herein are for reference  purposes only and shall not in any way affect the
meaning or interpretation  of this Agreement.  The waiver by any party of a
breach of any term or condition of this  Agreement by the other party shall
not  operate  as nor be  construed  as a waiver  of any  subsequent  breach
thereof  or a waiver  of a breach  of any other  term or  condition  o this
Agreement.  This Agreement may be signed in two or more counterparts,  each
of which shall  constitute an original but all of which together shall form
only a single instrument.

                                   -12-


<PAGE>



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of July 18, 1997.


                              /s/ A. E. Flower
                              -----------------------------------------
                              Allen Flower, Executive


                              COMSAT Corporation


                              By: /s/ Betty C. Alewine
                                  -------------------------------------
                                  Betty C. Alewine
                                  President and Chief Executive Officer

                                   -13-